Ministry of Innovation —

Losses from Internet crime more than doubled in 2009

The FBI says Internet scams are booming, with over half a billion in losses …

Back in the golden age of comic books, you always knew what was coming after the bad guy got a good dose of hot lead from the cops. "Remember boys and girls..." the last panel warned in 30 point type, "crime doesn't pay!"

Alas, it appears that Internet crime pays.

The Federal Bureau of Investigation reports that the total dollar loss from all cases referred to its Internet Crime Complaint center was $559.7 million in 2009. That's more than double the previous year: $264.6 million. And the number of complaints grew substantially as well: 336,655—a 22.3 percent jump from 2008's 275,284.

"The figures contained in this report indicate that criminals are continuing to take full advantage of the anonymity afforded them by the Internet," the FBI's Donald Brackman of the National White Collar Crime Center commented on the latest statistics. "They are also developing increasingly sophisticated means of defrauding unsuspecting consumers. Internet crime is evolving in ways we couldn't have imagined just five years ago."

In 2009 the median dollar loss from these incidents was $575. That means half of all the complainers sustained losses higher than that amount. But what is probably most frustrating to the FBI is that the top scam for which the agency received cries for help came from the victims of bogus e-mails purporting to originate from the Bureau itself. These represented 16.6 percent of the total number of complaints.

Report.exe

Typical of this kind of dodge was the Weapons of Mass Destruction Directorate e-mail that made the rounds last June. It gave the appearance of a confidential report on terrorism accidentally released by the FBI. "Recipients are reminded that FBI Intelligence Bulletins contain sensitive terrorism and counterterrorism information meant for use primarily within the law enforcement and homeland security communities," the phony e-mail temptingly explained. But when the curious clicked on the supposed document ("report.exe"), they downloaded malware designed to steal their own sensitive computer data or spew out spam messages.

Or they might have received a phony "official order" e-mail from the FBI's Monetary Crimes division informing them that they were under investigation for some financial crime. The message commanded them to hand over personal financial information, such as their bank account number, or face prosecution. Some of these e-mails even claimed to come from top FBI officials.

Next to fake FBI documents, consumers contacted the agency about merchandise which they ordered online and never received. These represented 11.9% of complaints. That category was followed by Advanced Fee Fraud scams (9.8%) —typically in which an e-mail recipient was told that they'd won some lottery, but must pay a fee up front to get the prize.

Close on the heels of these came identity theft (8.2 percent) and overpayment fraud schemes (7.3 percent). The latter involved recruiting people to (supposedly) ship merchandise overseas and receive payment from a creditor of their employer. The victim was then told by e-mail that they'd been overpaid for their last shipment, and to transfer some money back to the company. The trick was to get the target to wire the money back before their payment check cleared.

Free money!

Interestingly, the FBI report mentions as part of a scam trend a website that, when we checked on Sunday, was still up: nevergitback.com. The trend involves unsolicited phone calls urging consumers to go to various online venues to get their share of government stimulus money. "These sites require victims to enter personal identifying information after which they are directed to a second page to receive notification of eligibility," the report says. "Upon completion of an online application and payment of $28 in fees, victims are guaranteed to receive a large sum of stimulus money, but they never do."

We entered an e-mail address and name into nevergitback.com's online form, and were led to a page that told us that $28 would buy us a "free money list" with intel on "thousands of Government Agencies & Private Foundations" that "Give Away Millions Each Weak! [sic]"

"Currently there are over 1,425 US Government Agencies & 62,393 Foundations that are Giving Away Free Money," the site continues. "But not every one of these Free Money sources will give YOU Free Money... So... we have a Monthly List for you to use... So You CAN Find Free Money!" It also promises consumers that if they haven't received $7,500 "OR MORE... from the Sources on our 'Free Money List' -- Simply let us know and we will RETURN your $28 Refundable Deposit to you instantly!"

We're not planning on sending $28 to this outfit, so don't ask us how things went.

We're on a mission

In any event, all these activities are continuing through 2010. There's a brisk business in rental/real estate scams these days, the FBI says—grifters duplicating legitimate Web-based rental ads. "When the victim sends an email through the classified advertisement website inquiring about the home, they receive a response from someone claiming to be the owner," the Bureau warns. "The 'owner' claims he and his wife are currently on missionary work in a foreign country. Therefore, he needs someone to rent their home while they are away. If the victim is interested in renting the home, they are asked to send money to the owner in the foreign country."

The report also notes that, based on incidents in which the complainer could identify a possible crime suspect, the District of Columbia, Nevada, Washington, Montana, Utah, and Florida "have the highest per capita rate of perpetrators in the United States." We'll leave it to Ars readers to come up with fair and regionally unbiased explanations for those demographics.

Matthew Lasar
Matt writes for Ars Technica about media/technology history, intellectual property, the FCC, or the Internet in general. He teaches United States history and politics at the University of California at Santa Cruz. Emailmatthew.lasar@arstechnica.com//Twitter@matthewlasar

16 Reader Comments

There needs to be some intelligence test before someone logs onto the internet, to make sure that they're capable of understanding basic scams like this. Although it can even happen to the internet savvy I still think that if you remove people who don't understand you shouldn't download or open a random .exe file you receive in your email or those who think that giving $28 to get in a free money list is NOT a scam you'd see a large decrease in the number of people effected.Ugh that's elitist though, I'm mostly frustrated with sweet, naive grandma getting viruses every other week because she doesn't know better. Or worse, getting scammed and losing enough of her SS that you need to chip in and bail her out. These attacks are a drain on the time and resources of those who have to deal with the aftermath. If they could 'play' on Internet lite, or even better, not at all, how much time could I save? How much time could every other person with half a brain about the internet save? How many man hours could we recover?

Could you do a follow-up article on the demographics of the victims?I think it's much more interesting than the demographics of the perpetrators ... I tend to think that religious faith and age are highly correlated with gullibility, but I'd like to be proven wrong.

Who are the suc... peoples that send their money into the wild (by that I mean not the ID-theft passive victims)?

I just released a FREE ebook detailing all the Internet scams you should avoid. This book will save you thousands in potential loses or I'll refund your money in full. Just send $28 to cover shipping and our volunteers will immediately email you a copy of this valuable resource. Act now before you or some you love becomes the victim of an Internet scam. Order now and for an get a second copy for just $20 more, makes a great gift for Grandma!

I just released a FREE ebook detailing all the Internet scams you should avoid. This book will save you thousands in potential loses or I'll refund your money in full. Just send $28 to cover shipping and our volunteers will immediately email you a copy of this valuable resource. Act now before you or some you love becomes the victim of an Internet scam. Order now and for an get a second copy for just $20 more, makes a great gift for Grandma!

Looks like an awesome deal, but I can't seem to find your email anywhere.

I just released a FREE ebook detailing all the Internet scams you should avoid. This book will save you thousands in potential loses or I'll refund your money in full. Just send $28 to cover shipping and our volunteers will immediately email you a copy of this valuable resource. Act now before you or some you love becomes the victim of an Internet scam. Order now and for an get a second copy for just $20 more, makes a great gift for Grandma!

A follow-up article detailing the demographics of internet scam victims would be a valuable resource - to the scammers! They would probably appreciate an organized breakdown of their success rate to aid in refining their social engineering techniques.

These are only numbers they know about. The real crime is within ADVERTISING. The big companies, and some smaller groups are using complex P2P advertising bot schemes that pay over a billion a month, yet the advertisers do not care as long as they get their revenue. The problem is that this revenue is stealing from everything else. The revenue side of the internet is broken.

This "pay for a list of free government money" isn't new. Anyone ever seen that clown on TV with the suit covered with green dollar bills? He's been hawking a book for the same thing, from years ago! He's just moved to the internet, set up a pyramid scheme, and hit it big!

It always astonishes me to hear just how many people fall for painfully obvious scams. One would think that if one was that clueless, they'd avoid things that could make them lose their life savings, out of a kind of self defense--but people never stop fucking themselves over. The scammers don't even have to bother making their scams look genuine, people flock to the stupidest shit they find.

Really, it just makes for good entertainment. Keep these articles coming.

@Game_Ender & AdamM - I am seriously tempted to open up a domain and website to ACTUALLY collect that money for that list... I imagine I could actually make/scam some money that way...

I also see a lot of what I term non-scam/scams on the net... for example I frequently see "photo contests" in which you can enter to win $3-5000 in camera gear. Entry is usually $30-50 and they clearly state that submissions close when they reach 200 entries, which typically happens in 3-4 weeks. Sometimes it's worded differently, but the ones I'm referring to do actually award the prize as promised and have been running a long time. Obviously, it's not hard to do the math and see the contest organizer is pocketing several thousand dollars for running the contest which basically equates to gambling... I don't call them scams because #1 they award the prize as promised and #2 they are actually fairly up front about what is going on.